This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Facebook Flub Not Critical for Nasdaq: Analysts

NEW YORK ( TheStreet)-- Facebook (FB - Get Report)'s botched initial public offering is a black eye for Nasdaq OMX Group (NDAQ - Get Report), but is unlikely to do lasting damage to the exchange's share price, according to a pair of analysts who cover the company.

Facebook's offering was delayed by 30 minutes on Friday due to technical glitches the exchange has acknowledged. The problem "infuriated individual investors and asset managers across the country, with some saying over the weekend that they remained uncertain about how many Facebook shares they own after Friday's trading--if they own any at all," according to a report in The Wall Street Journal.
Nasdaq shares rebounded Monday after losing 4.4% on Friday.

While Nasdaq shares lost 4.4% Friday, they bounced back on Monday, and were up by 2.64% in mid-afternoon trading. Shares "were already priced for disaster," according to Stifel Nicolaus analyst Matthew Heinz, who retained his "Buy" recommendation on Nasdaq.

Heinz argues the incident could easily have occurred at a Nasdaq rival and is mostly indicative of "the mounting pressure on cash equity market operators to perform flawlessly in an increasingly complex trading environment, where any mishap is relentlessly criticized and 99% flawless execution falls on deaf ears."

Earlier this year, for example, BATS, another exchange operator, flubbed its own IPO and had to withdraw it from the market. It has been considering listing on a rival exchange such as Nasdaq or NYSE Euronext (NYX), according to The Wall Street Journal.

In addition to Stifel's report, analysts at Keefe Bruyette and Woods continued to recommend Nasdaq shares. They argue "the sheer magnitude" of Facebook's offering "and the speed with which [Nasdaq] addressed the issues" are marks in Nasdaq's favor. Still, the analysts note the NYSE "is unlikely to be shy, about flagging the issue - now resolved - when pitching for business or looking to poach new clients."

-- Written by Dan Freed in New York.

Follow this writer on Twitter.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
NYX $0.00 0.00%
FB $117.43 -0.96%
NDAQ $62.27 -1.17%
AAPL $95.18 1.64%
GOOG $692.36 -0.84%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs